Camp Sky

I am currently at Camp Sky in Kusungu at the Teachers Training College. The camp was started by Peace Corps Malawi’s Education group and it invites the top students from all over the country. These students are taught a variety of subjects at the camp, from biology to cooking. It’s a great camp, running from the August 18th to the 26th, and requires a immense amount of logistical planning (especially in Malawi). Kudos to the Camp Director. I’m here to teach business for the entire 6 days of the camp.

We had our first classes yesterday and it was great. Although only about 3 kids seem to be keen on business and are very sharp, the class is still going well. The students have been assigned a project of creating a business plan for their mock businesses, which they will present to the class at the end of camp. The most difficult part of the whole lesson was trying to push students to think outside the box. When we asked them to come up with a creative business idea, for a product that is not made in Malawi, they all wanted to grow and sell vegetables.

The problem is that every person in Malawi grows and sells vegetables, it’s the most available product. This is what you find in every market in every village in Malawi and for these students, most from agricultural areas, this is all the business they know. So its understandable that this is the idea they embrace. A majority of other goods all come into Malawi from other countries, and thus the wealth that’s generated in Malawi often leaves Malawi, leaving the country poor and citizens scratching their heads on why that is.

The answer is simple: make the goods locally, make them in the country. Instead of buying cheese and other “exotic” products from South Africa, make it in Malawi. Malawi has wide diversity of land and they can produce virtually any product they want right here. Malawians have this perception that because a product is from America or China it is better than what they make here. For example clothes, bulk come from Tanzania, but also China and America. These clothes can easily be produced in country. After all, Zambia is major cotton producer and it’s right next door.

Hopefully, by the end of camp we can coax these students to think outside the box, think of creative business ideas. Anyone that understands some basic business tools and has a good idea will make a lot of money in Malawi. The country is ripe with opporunity and there is major development happening concurrently. We will see how the first part of the assignment goes later today when we review homework.

The camp otherwise has been awesome. I met a lot of great education volunteers that I had never met before. And those that I had only briefly met before, I saw a whole new side too (Yay!ger). Everyone is nice, fun, and they are all great teachers. They have a patience with students I could never fathom. Last night it was Anasol’s birthday and we had cake and sang happy birthday. Cake! Such a rarity, it was tasty. Also, Ben taught salsa dancing to all the students. The power went out just before dinner, so we lit the hall with candles and everyone danced to music played from small battery-operated iPod speakers.

The new education group also came to the camp as part of their training. All them are really cool and me and Peaches were dicussing the interesting mix of people in Peace Corps. In Malawi I have more diverse mix of friends (personalities and geographically) than I have ever had in my life and its wonderful. Not to discount my friends back home, but Boston breeds a certain of person as does New York. But here the volunteers are from everywhere and they all have the same itch. Some have a streak of adventure, others are quiet, and others fiercely independent, but they are all good-hearted, have geniune desire to help, and are compassionate. Though each is incredibly different we get along well and became very close very fast.

Camp Sky has been a good reminder of why I joined Peace Corps. The experience is unlike anything else I have done before with the most interesting, quirky, unique, and simply awesome people I have ever met. After Sky we head up to Karonga for Karonga’s Women 2 Women Workshop to teach another business class. Last week Karonga II went back to America due to medical reasons. I hope she will be alright, she will be missed.

Home Away From Home

Where I live: http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=malawi&ie=UTF8&hq=&hnear=Malawi&ll=-10.945737,33.578864&spn=0.003919,0.004823&t=h&z=18

Project: Mwazisi Honey

Honey, honey, honey. Where to begin with this one; so much has happen in the past few months. Honey business occupies a majority of my time, energy, and money. The beekeepers in the Mwazisi area were loosely associated for a long time. Most producing honey independently and eating it. My predecessor pushed an association to form but it seems to have collapsed by the time I arrived. It was said to have about 60 members. But the problem was that so much of his energies were devoted to the massive EPA construction that there was little time for the Association. So I took the liberty of wiping the board clean and starting over. I called a meeting of all interested citizens, held elections for an executive committee, penned a constitution (based on the Livingstonia constitution). We enacted a registration fee, rules for club membership, contracts, and formally founded the Mwazisi Beekeepers Association (MBA).

We currently boast a membership of over 100 people, each club with 10 members. The first training will be held on August 16th, spanning over 3 days covering everything from hive building to apiary management. In the meantime, I ordered plastic jars from Polypack in Blantyre and designed a label for the MBA brand. We will hopefully secure a loan with Total Land Care (TLC) that we can pay back over the next three years. This loan will cover hives, suits, and smokers for every member. I’m also in the process of securing permits and licences to hang hives in Vwaza Marsh and Nyika, as they have an abundance of flora. Once hives are up, I can begin business training for all the members, covering topics from SWOT analysis to bookkeeping. If all goes well and production commences within 12 months, we can begin the process of marketing, perhaps even with the aid of OVOP.

I’ve never written a formal constitution or drafted a loan contract, so it has been quite an educational experience. I used everything I learned from banking, especially everything Rudy taught me by explaining legal documents. Who would have thought confidentiality agreements and CIMs would help me draft contracts for beekeepers in Northern Malawi?

I’m pretty proud of these documents I made, more surprised really that I have the ability to write them. The surprise extends to managing 110 people, creating a brand, and marketing the honey. So, a big thank you to Rudy for the invaluable business lessons. I’m learning on my own that things are much more efficient and faster when less people are involved. The less people the more productivity at least so I’ve observed when it comes to managing beekeepers.

Structuring the organization has been the most difficult task, mainly because I don’t know. Changes will have to be made as we go, but after extended thought and discussions I determined the following structure: each club will manage itself independently, with its own Chairman, Secretary, and Treasurer. Each club will provide honey and manage its own finances. The Association will be the umbrella over each club, providing valuable services such as loans, equipment, processing facilities, bottling, labels, other support, and most importantly brand and marketing of bee products. There are a lot more intricacies to this relationship detailed in the constitution and contracts, like the sales fee, etc. This is quite serious for a group that is not even fully producing honey yet, but it’s necessary. The loan contract could be, if all goes well, for about Mk. 5 million, which is no joke in a rural village. One club falters and that loan falls on the Association. The contracts I drafted incorporate some of the principles used by the Grameen Bank, that extracted from reading Banker to the Poor. The concept of using groups for loans, in this case clubs, and using social/community pressures as incentives for repayment. Will the system work in Malawi? I don’t know, but I really hope it does, even though I’m concerned club size is double that used by Grameen and the loan amount is much larger than a microloan.

My goal, as I told the MBA members at the first meeting, is to walk into a store in the boma and find a bottle of Mwazisi Honey. 2 years. Bwenu. Whatever it takes, I want that goal achieved. Honey is in short supply in Malawi, far below demand. Thus, prices keep going up, currently about Mk. 500 to Mk. 700 per 500 g bottle. Which is absurd if you consider that 1 kg of peanut butter is about Mk. 500 and 500 g of jam is about Mk. 450. There are a couple of major producers in the North, mainly Mzuzu Coffee Growers , that bulk buy honey from local farmers at Mk. 200 to Mk. 300 per kg, then bottle and sell at more than double the price. This excludes profits realized on by-products, such as candles. Honey is a viable business in Malawi, especially in the light of tobacco regulations.

The only problem (and it’s a big worry that keeps me up at night) is that it all hangs on everything working simultaneously. I’m throwing all the pieces up in the air, with a hope and prayer, that they all fall in place and that the puzzle fits together. There is a Plan B, but even that maybe is a crapshoot. If the loan with TLC doesn’t go through, then grant money is my last hope (and I really don’t want to use grant money during my two years here, if I can help it, it just seems like a ridiculous concept). There are too many variables at play: the loan, active membership, paying back the loan, getting equipment, using it properly, producing honey, producing good honey, demand for honey, licences, taxes, approvals, permissions, the list goes on. Sometimes I wonder if it all fails I will just take over and make the honey myself if I have to. Another issue is that MBA is tied closely to the EPA construction project, as one whole room is dedicated for honey production. That needs to be completed before any significant advances are made with the honey group. The stress of the whole project is immense and ever growing. As I detailed in a previous post, stress seems to be positively correlated with an increase in membership. Everyone has hung their hopes on me handling it all. We have about 10 clubs in the Mwazisi catchment area, and now that Destroyer has gone, Kampenda has sent an 11th club to join. About 110 people. I need pieces to start hitting the ground so I can make changes accordingly. As of now, all the pieces are still in the air. And even once they fall, and if by some celestial miracle they fall in the right places, then the whole thing is wrapped in a bow of sustainability. Once I leave the group has continue on its own.

Project: Jatropha

G20, I heard through the village wire, has demanded a reduction in tobacco production and exports from several countries, including Malawi. Tobacco is life in Mwazisi and most of Northern Malawi. It is the single income source for not only the community but also the crowds of tenant farmers that travel to the North every year to help harvest tobacco. Without tobacco they have no means to live. This decision has been in talks, on and off, for several years, but has acquired a new shade of seriousness and finality. Fortunately, this global decision on tobacco will be slowly phased in over a few years, providing time for farmers to change their crops.

Tobacco itself is a terrible crop. It destroys the soil, requires immense amounts of expensive fertilizer, and requires a large labour force. Also, drying tobacco requires drying sheds, which locals build from trees cut from the area: the largest cause of deforestation in Mwazisi. The Chewa tenant farmers that come up are in constant feuds with the Tumbuka farmers. And lastly, the price in the auction floors in Mzuzu fluctuate so much, hitting such lows, that it is not profitable at all. Once the fertilizer, tenant costs, transport, tax, and licences are factored in, most people realize a loss. But it is, and has been for a long time, part of life here.

This is where the jatropha tree comes in. There has been a big push to plant jatropha all over Malawi, but people seldom like change, especially in rural communities . They are sceptical and truly can’t take the risk of new ventures. Jatropha is a tree that grows best in the worst soils and conditions. The fruit it produces are little black shelled seeds about the size of a marble. Inside the shell is a white seed, that when processed, produces a poisonous liquid. This liquid can be used as an alternative fuel to diesel. Any diesel vehicle, with a little modification, can run on jatropha oil. It’s an amazing tree and could be a wonderful, sustainable, source of fuel. Simultaneously, it could lead to increased tree planting and the reversal of deforestation in the area.

The new pressure of tobacco reduction has made my goal of converting Mwazisi into a jatropha producer that much easier. Jatropha fruits in about 18 months, less than the time frame allotted by G20 to halt tobacco exports. With fossil fuel prices trending up; alternative and renewable fuels are a necessity for the future. I’m pushing the community to plant a few acres at a time, slowly phasing in the new crop, testing the waters.

The big push for jatropha in Malawi is lead by a company called Bio Energy Resources Ltd. (BERL) based just outside of Lilongwe. This company is the only major jatropha fuel producer in Malawi (that I have heard of so far) and it provides seed to any farmer that wants to grow the tree. I was a little disappointed when BERL told me that most of their operations are focused in the southern regions and are not ready to expand to the North. But this Malawi, where people can finagle anything and I will try to finagle BERL. BERL’s offer in Malawi is enticing as it provides sufficient incentives to farmers while maintaining the company’s profitability. BERL provides seed to farmers, who sign a contract agreeing to sell the fruit to BERL for 10 years. BERL buys the fruit from the farmers at about $1 per kg. From seed to fruit BERL periodically checks on the contracted crops, ensuring proper growth and providing support as need arises.

At $1 per kg it’s better than tobacco auction prices: about $1.80 per kg (and as low as $1.45), which are very little once all the costs are factored in. Jatropha has almost no costs, other than opportunity, as it doesn’t need fertilizer or licences and there is no tobacco tax. Currently diesel, which has run out in Rumphi and Mzuzu, is at Mk. 231.20 per litre. Jatropha, once processed, could be sold at a comparable or much lower price.

I’m meeting with BERL next week, hopefully, to discuss the prospect of jatropha in Mwazisi. Working with BERL would provide easy access and conversion to jatropha. Plus, there is already a buyer and demand for the crop, thus, lower risk in the venture than tobacco. The only thing holding us back is what if jatropha is not as profitable as they expected, what if the company folds? Then we could hopefully process the oil ourselves, else the farmers would be stuck with loads of useless jatropha. The process for producing jatropha oil is similar to groundnut oil. In fact the same equipment can be used interchangeably (just don’t do both as jatropha is poisonous). We might even plant a little jatropha independently and the process the fruit into paraffin substitutes. We will have to wait and see how everything pans out and more importantly if the community welcomes the change.

Project: Women’s Group

Women’s empowerment is a major part of the Peace Corps agenda in Malawi. It is a part of every program, an umbrella covering over each project, much like HIV/AIDS. In Mwazisi one of my projects is to create a formal women’s group that will focus on entrepreneurship. There was a loosely formed group before, but it was not very active and practically the leader of the group was the only participant. The leader of the group, Mrs. Nyabota, is an amazing lady that accomplished so much on her own. Together we hope to reinvigorate the group and start over. Our first business will be pressing oil from groundnuts.

Groundnut oil pressing can be fickle. Many people were unable to turn a profit while simultaneously competing with big store brands like Kazinga (Unilever) and Kukoma. So we ran a brief feasibility test. The problem, we discovered, was with the groundnuts. Local groundnuts are quite dry and produce very little oil, thus rendering the enterprise a waste of time. However, we tested the press with CG-7 groundnuts, which were issued by the government, and they produce a lot of oil, enough to make the product profitable.

The big manufacturers, with economies of scale, produce it so cheaply that it still eats our profit significantly. But I devised a solution to our problem (though we’ll have to see how well it works in practice). When the nuts are processed into oil the output is oil and a remainder of crushed groundnuts. This leftover material was considered waste, usually fed to livestock. It’s still very nutritious and tastes like raw groundnuts. I took the crushed groundnuts, roasted them in a pan with a little of their oil, and spooned in an equal proportion of brown sugar with a dash of water. Once the mixture melts, I poured it into a plate to cool, then cut it into squares. This is a simple Indian sweet my grandmother used to make, but with more of a peanut bar twist. We took the pieces and did a market test selling them at Mk. 5 a piece. The community loved them. Very little sugar was used and the waste material added a second revenue stream to the oil press. We generated a profit of about Mk. 90 on the remainder of 1 kg of pressed CG-7 groundnuts.

A third revenue stream that we are still testing is fire briquettes. When we buy the groundnuts they are shelled and we run them through a manual sheller to remove them. We collect the waste shells and keep them in a bucket. These are great materials for fires/fire starters. The shells are basically combined with some cassava flour and pressed into little square blocks. These blocks, once dried, can be sold to people in the community to use in their cooking fires. While we still need to see the actual profitability of this product, if it works, it would boost our total revenue. Also, by using the shells we basically made full use of the whole groundnut, wasting nothing.

The last test we ran was on quantity sold. We could not compete on price with 250 ml and greater against the big brands (maybe someday in the future, but not starting out). Currently, the only way people have cooking oil is that the local shops buy from supermarkets in the boma, put it on a matola, transport it to the village, and sell it. The oil supermarket price has then a transport cost and shop profit tacked on. But if we make the oil locally in the village and sold it in 25 ml sachets, starting out, we would profit. Each sachet would only be Mk. 20. These sachets, if enough are made, can be taken by bicycle to surrounding villages, reaching all the way from Kampenda to Bembe. The press itself cost Mk. 18,000 and at breakeven that’s about 90L of oil (if considering only the oil profit), it will be up to the group whether they want to undertake this business.

If this business doesn’t meet expectations, or succeeds enough to expand to other businesses, we want the group to begin exploring new ventures. Ideas in the works are the production of juice, jam, fruit drying, soap making, and pending some operational issues, baking. I hope the women’s group is successful and sustainable. The women I have met in Mwazisi are amazing, truly super women, work more than anyone I have ever seen. They are keen to start their own businesses and generate their own income. The only problem is they need the business tools (bookkeeping, business plans, etc.) and some reassurance that their businesses will succeed. After all, they are sacrificing the little time they have, which could be spent farming or the million other things they do everyday.

Mrs. Nyabota is the best example of an active successful woman in the community. Long before Peace Corps showed up in Mwazisi, since she was a young girl, she was running her own businesses from here to Bolero. She was producing dry fruit, jam in Bolero, a bakery in Mwazisi (that she built out of an oil drum, fuelled by wood fire), an egg farm, a tailoring shop, and a grocery shop. All this while also maintaining and caring for her household. She is a sharp business lady and Mwazisi is lucky to have her here.

Project Series

I thought that now out of banking my work schedule would be liberal and much more relaxed. I could not have been more wrong in that assumption. I have dilly dallied on this blog for quite sometime, nothing really pertaining to my project work. People don’t talk about what they do at work, because its work, and I fall under the same reasoning. My thoughts, which provide me with ample amusement, are not very pertaining to family and friends reading this blog. Thoughts, scribbles really, are all I usually write down. So I present the project series, a mini-blog-series dedicated to each project I’m working on. What exactly am I doing so far away in Malawi?

Mrs. M

Get well soon Mrs. M.